48 States Investigating Whether Google's Dominance Hurts Competition

District of Columbia Attorney General Karl Racine (left) and Texas Attorney General Ken Paxton speak Monday about the launch of an antitrust investigation into Google outside the Supreme Court in Washington, D.C.

Mandel Ngan
/ AFP/Getty Images

Listen

Listening...

/

Originally published on September 9, 2019 4:44 pm

Updated at 3:08 p.m. ET

State attorneys general of 48 states, Puerto Rico and the District of Columbia announced a major probe Monday into Google's dominance in search and advertising for practices that harm competition as well as consumers. Texas Attorney General Ken Paxton is leading the bipartisan pack.

"The Internet is not free. This is a company that dominates all aspects of advertising on the Internet and searching on the Internet," Paxton said at a press conference on the steps of the Supreme Court in Washington, "as they dominate the buyer side, the seller side, the auction side and even the video side with YouTube."

The investigation includes all the states, except for California and Alabama.

The tech giant, along with Facebook, controls nearly 60% of all digital advertising, according to eMarketer. A wide range of businesses that must publicize their services — be it a hair stylist, a hospital or a Fortune 500 company — must abide by the terms and prices set by two companies. But, as eMarketer notes, the duopoly's control is diminishing as Amazon grows.

In June, Paxton, a Tea Party Republican, expressed concern in a press release that even when no money changes hands, consumers are paying for services with their data and that "technology platforms often lack the incentive to provide strong privacy protections for consumers." He and 42 other attorneys general asked the Federal Trade Commission to work closely with them, to look at anti-competitive practices and predatory conduct.

Last week, Google agreed to pay $170 million to settle allegations that it violated the privacy rights of children by tracking them, without parental consent, as they watch cartoons and other youth-directed content on YouTube.

Last week Google disclosed that, in addition to state-level government action, the Justice Department has asked the company to hand over documents. Kent Walker, Google's senior vice president of global affairs, defended the company in a blog post, saying: "Things that were science fiction a few years ago are now free for everyone—translating any language instantaneously, learning about objects by pointing your phone, getting an answer to pretty much any question you might have."

Led by New York, attorneys general from eight states and the District of Columbia announced a probe into Facebook as well.

Editor's note: Google and Facebook are among NPR's financial supporters.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

AILSA CHANG, HOST:

Google is on notice. Fifty attorneys general are teaming up to investigate the tech giant for anti-competitive practices and harm to consumers. State Attorney General Ken Paxton of Texas launched the investigation from the steps of the Supreme Court this afternoon.

(SOUNDBITE OF ARCHIVED RECORDING)

KEN PAXTON: What we've all learned is that while many consumers believe that the Internet is free, certainly, we know from Google's profits that the Internet is not free.

CHANG: A closer look on today's All Tech Considered.

(SOUNDBITE OF ULRICH SCHNAUSS' "NOTHING HAPPENS IN JUNE")

CHANG: All right, here to debrief with us is NPR's Aarti Shahani. Hey, Aarti.

AARTI SHAHANI, BYLINE: Hi.

CHANG: So it seems like every week now the government is opening some new investigation into big tech. It's really been a steady drumbeat. Can you just tell us how this investigation feels different to you?

SHAHANI: Yeah, no, it was definitely a show of force. And as you said, 50 attorneys general are launching an investigation. That's 48 states, Ailsa, as well as the District of Columbia and Puerto Rico. The two states sitting it out for now are California and Alabama, and they could still join in, OK?

The group has already subpoenaed Google, though to be clear, this is not a top-to-bottom probe of everything that Google or its parent company, Alphabet, does. It's a look at Google's search and advertising and how those two services may be intertwined in ways that are overall harmful to consumers. To explain what that means, have a listen to one of the AGs who spoke this afternoon, Arkansas Attorney General Leslie Rutledge.

(SOUNDBITE OF ARCHIVED RECORDING)

LESLIE RUTLEDGE: As a new mom, when my daughter is sick and I search online for advice or doctors, I want the best advice from the best doctors, not the doctor and not the clinic who can spend the most on advertising.

SHAHANI: So she and other AGs are worried that Google's so-called free service comes at a cost to consumers, as well as to companies who fear they're frozen out of business unless they pay Google. The European Union has made this point, too, and move to fine Google billions of dollars. The AGs referred to Europe repeatedly today.

CHANG: OK, and we should note that Google is an NPR sponsor. So what has Google been saying in response to this new investigation?

SHAHANI: Yeah, so Google declined to comment on the latest announcement. But on Friday, a top Googler on public policy, Kent Walker, put out a blog saying things that were science fiction a few years ago are now free for everyone, meaning Google's making your life better, helping you answer any question you have, putting out an incredibly powerful tool to translate just about any language you can think of.

So I would point out that this investigation, and also the one into Facebook that nine AGs announced last week - they're looking at the same issue. It's digital advertising and the decisions people make based on what they're seeing on the Internet. Digital ads are Google and Facebook's cash cow. Those two companies together control nearly 60% of digital ad sales. And according to eMarketer, their control this year is actually dipping a bit because of Amazon's rise. But still, it's a lot of control.

CHANG: All right, so as this investigation unfolds, what are you going to be looking for?

SHAHANI: Whether it expands to questions, for example, on consumer data and privacy. You know, I would also point out there's a change in the mindset right now. The Texas attorney general's office in 2011 investigated Google for its search engine and decided not to pursue a case. But now, people understand the Internet is where commerce happens. They are the new railroads, and railroads didn't regulate themselves.